It's Time We Have the Freedom to Ship Alcohol Between Provinces

09/01/2011 02:26 EDT
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Updated
11/01/2011 05:12 EDT

Popular radio personality and former MuchMusic VJ Terry David Mulligan experimented with civil disobedience in May of this year. His rebellion? He carried nine bottles of wine across the B.C. and Alberta border in violation of the Importation of Intoxicating Liquors Act, which makes it a crime to cross provincial and territorial boundaries with alcohol.

He had informed the liquor control boards of both provinces before crossing, and he let the RCMP know that he will be breaking the law well in advance.

But he didn't get arrested.

In a news story, regional RCMP spokesman Sgt. Patrick Webb said, "It does not appear prosecuting him is in the public interest." In fact, Webb said that he couldn't recall anyone ever being prosecuted under the prohibition-era law in his 30 years with the RCMP.

And no one should. It's not charging Mulligan that is contrary to the public interest, but charging anyone, ever. Like prohibition itself, this 1928 law is not just outdated, but ridiculous. Not only is the law ridiculous on its face, it also happens to be contrary to our constitutional guarantees to free trade between the provinces.

That's what Ian A. Blue, senior counsel at Gardiner Roberts LLP, argued in a paper published by the Macdonald-Laurier Institute in June of this year. Blue argues that section 121 of the Constitution Act of 1867 has the unambiguous effect of guaranteeing free trade within Canada. That's what the authors intended, that's what would be understood from the legislative history and context, and that's the meaning you would gather from a purposeful interpretation of the Constitution.

But a wrongly-decided 1921 Supreme Court decision set a precedent that permits this absurdity to continue. In Gold Seal Limited v. The Attorney General of the Province of Alberta, the court ruled that section 121 -- which reads: "All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces" -- only prohibits provincial customs duties but does not prohibit other protectionist provincial trade barriers.

Given the text, the context, and the purpose of the section, this decision makes little sense, and is ripe for being overturned. Such a narrow reading of the provision would be justified only if the section referred explicitly to duties, as in "be admitted free from Duty," as was, for example, used in several reciprocal statutes between the then-colony of Nova Scotia and the Province of Canada, but it doesn't.

And it doesn't for a very good reason. The mischief that the provision was to remedy was the relative weakness of our economy in comparison with the United States. We understood, at the time, that free trade within Canada would convert our markets from five smaller economic units into a market four million strong. The idea was to make economic activity across provincial borders identical to economic activity within each of the five provinces. Just as Torontonians could trade with Kingstonians without seeking leave from some government authority, so could Kingstonians trade with Montrealers without having to declare or ask permission when crossing the Ontario-Quebec boundary.

Still, the provision stands, and it is currently illegal to carry beer or wine from Gatineau to Ottawa, for example. This might come as a surprise to residents of Ottawa who routinely travel to Gatineau for their beer or wine. Maybe they don't know, but they're engaged in illegally "importing" their alcohol, and are subject to charges.

Meanwhile, the liquor control boards are not up in arms over the failure of the RCMP to dutifully uphold the law. Surprised? Don't be. The law gives the liquor control boards and large-scale alcohol producers an enormous benefit, keeping prices high, keeping smaller competitors from growing their consumer base, and generating incredible income. All at the expense of small vintners, craft breweries, and those of us who buy beer and wine. They don't complain about selective enforcement because they know that charges against someone like Mulligan would shine a bright spotlight on a law that is patently ridiculous.

They're afraid of a bit of sunshine. They don't want to publicly arrest and prosecute Mulligan, or start insisting that Canada Day celebrants be arrested if they carry a bottle of wine from Gatineau over the bridge into Ottawa. If they do, that would open the floodgates. And if it opens the floodgates, the Canadian Constitution Foundation, a libertarian public interest law firm, just might take notice and decide to disinfect by way of a legal challenge.

That's what happened south of the border. When Juanita Swedenburg, a Virginia vintner, decided to challenge the prohibition on interstate wine importation in New York, the Institute for Justice, the U.S. equivalent of the Canadian Constitution Foundation, took up her case and won. The New York case, along with a similar case in Michigan were appealed to the Supreme Court. In May of 2005, that court struck down all such prohibitions as unconstitutional. After the victory, Clint Bolick, strategic litigation counselor for the Institute, said, "Now wine lovers all across the nation can obtain their favorite wines without having to commit an act of civil disobedience."